Democracy is in trouble. Authoritarian government and violation of civil liberties are both on the rise in a host of nominally democratic countries including Austria, Brazil, Czech Republic, Germany, Hungary, India, Philippines, Poland, Russia and Spain, not to mention the United States under the erratic presidential regime of Donald Trump. What explains this global weakening of democracy? Some erosion of democracy can be attributed to the clandestine machinations of hard-right super wealthy capitalists such as Charles Koch (see Nancy MacLean, “Democracy in Chains,” 2018). But the global fraying of democracy has a more general cause: neoliberal capitalism and the alliance between elected governments and this exceedingly hierarchical type of capitalism.
All versions of capitalism have trouble with democracy, but the conflict between neoliberal capitalism and genuine democracy is especially intense. Neoliberalism presents itself as a free-market capitalism that emphasizes privatization, austerity, deregulation, free trade and reduction in government spending. Under neoliberal capitalism, rentier capital and financial speculation become increasingly important. Rentier capital is money used for the purpose of increasing money without producing useful goods and services (as in rent or usury). Rentier capital is addicted to financial speculation and allergic to any form of government regulation that might restrict such speculation. Neoliberal capitalism has historically been characterized by grave economic instability, extreme income inequality and nearly complete disregard of the environment.
The political heart of neoliberal capitalism is an effort to curtail democracy so that popular initiatives cannot constrain profit-making activities, regardless of how broadly injurious these activities may be. The alliance between neoliberal capitalism and elected governments weakens democracy in three related ways. First, it encourages revision of political rules in ways that prevent democratic oversight of the economy. Second, the alliance stimulates popular frustration with elected governments because these governments cannot correct the economic pathologies induced by neoliberal financial speculation. Such unheeded frustration can generate demands for authoritarian leadership. Third, the social chaos emanating from neoliberal capitalism can trigger attacks upon vulnerable minorities — e.g. immigrants, Muslims, people of color — that are somehow associated with the economic dysfunctions.
But the neoliberal-induced decay of democracy is not inevitable. Although currently widespread, democratic degeneration can be reversed even within the context of capitalist economic systems. The political structure of capitalist societies is largely determined by the balance of power between the owners of capital on the one hand and the suppliers of labor (everyone who works for a living) on the other. Re-energizing democracy will require a major acquisition of power by working people. If this should happen, ownership of capital may not be abolished, but the actions available to capitalists will be thoroughly regulated. Among other things, finance capital would be transformed from a means of speculation to a servant of the productive economy. Working-class power, even when exercised within a capitalist system, can establish vital programs such as comprehensive public health services, free education at all levels, jobs for everyone willing to work, elimination of homelessness, and ample environmentally friendly public transportation systems. Although economic inequality will continue under capitalism, it is feasible to establish what radical economist John Weeks calls the capitalist equity principle: expansions of the national economy to be shared by everyone rather than hoarded by the capitalist class.
The Rocky Mountain Peace and Justice Center’s “Peace Train” runs every Friday in the Colorado Daily.